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Saturday, August 31, 2013

Yesterday Chesapeake settled a class action lawsuit
challenging the company for improperly deducting post-production and transport
fees from gas royalties. According to the Daily Review, Chesapeake has agreed
to fork over $7.5 million.

The lawsuit, filed electronically earlier in the day, named
14 plaintiffs from Pennsylvania and New York as representatives of the “class”.
The plaintiffs claim that post-production fees were deducted from their royalty
payments despite terms in their leases that precluded Chesapeake from deducting
those costs, and that the fees were in excess of the actual costs. They also
claim

that Chesapeake "breached its duty" by basing
royalties on the market value of the gas prior to refining – at “below market”
price.

However, the leaseholders won’t end up with all the
royalties they’d hoped for. They’re still going to have to pay about 72 percent
of post-production costs, and cover 100 percent of the costs related to
transporting gas through the pipelines.

The settlement proposal still has to be reviewed by a
federal judge before final approval.

Monday, August 26, 2013

Peter Saltonstall and his wife, Tacie, own King Ferry Winery. The small farm winery, located on the east side of Cayuga Lake, recently received a gold medal for their semi-dry Riesling. For some reason, Finger Lakes wineries do well when it comes to winning awards. So well, that Governor Andrew Cuomo often mentions wineries when touting NY products and agricultural achievements. The governor also puts a lot of energy - publicity-wise - into touting NY state agriculture, and in particular, the growing organic sector. These are examples of economic growth for the state, he says.

So why, if he values the wineries, organic farms, Community Supported Agriculture projects, farmer's markets, dairies.... why does he still waver on fracking? Time and again researchers and farmers have demonstrated how destructive industrialized drilling can be on agricultural land. Industrialized gas drilling harms dairy farmers and ranchers, can affect crop yield, and raises food safety issues.

One of the biggest issues is land use; industrialized drilling in Pennsylvania is taking over the agricultural landscape. Last summer Peter took his camera on a plane trip along the Susquehanna River, shooting footage of farms, fields, forests, and gas pads, pipelines, and other infrastructure. With the help of Ithaca College Park Productions he created a travel-documentary that shows what drilling looks like in Pennsylvania's northern tier. He also raises concerns regarding the impacts of hydro-fracking on NY's farms and wineries.

Friday, August 23, 2013

While President Obama waffles on fracking and the Keystone XL pipeline, the Louisiana Sinkhole keeps on growing. It's now now 25 acres in size and is devouring trees by the dozen. Here's a video from August 21

The next morning it had another tree for breakfast.

This is what the sinkhole looks like now - video from a flyover later on the 22nd.

How big do these things have to get before someone decides enough is enough?

updated Friday morning:
So, what do a salt cavern and fracking have to do with each other? This is the question a curious reader asked earlier this morning. Salt caverns, it turns out, make great places to store gas (or propane). Right now, on Seneca Lake just north of Watkins Glen, NY the Inergy company is converting the salt caverns to a gas storage facility. The problem: that the NY Department of Environmental Conservation (DEC) review leaves many questions unanswered - and DEC hasn't responded to the queries by residents in Watkins Glen and around the lake.

What people know: the storage facility is being built to hold gas from all the new (fracked) wells being built in PA and OH. What they don't know: that the caverns won't collapse any further than they already have. They don't want a sinkhole like that in Assumption Parish.

And the Keystone connection? So many... let's just start with lack of good regulatory oversight (spills, pipeline breaks).

Thursday, August 22, 2013

During President Obama's trip through upstate New York this week he is bound to be greeted by fracking protesters from both sides of the issue.

On one side are the folks who want to make sure that they have clean water to drink, clean air to breathe, and enjoyment of the property they have invested their life savings and lifework into. Some of these folks live in towns, some on farms. Some are landowners, some not. But they all have one vision: fund renewable energy research to get us off the fossil fuel fix we're stuck on. And, based on recent surveys, they represent close to half of the population of the state.

They plan to show up in Binghamton - the "epicenter of fracking debate- on Friday. Their message: that it would be irresponsible to permit shale fracking anywhere in NY, and particularly in the Southern Tier, without comprehensive public health protection and clear liability standards. "We need a study of public health harm before this practice is allowed," says Walter Hang of Toxics Targeting. "That should be our national policy."

On the other side are folks who really, truly believe that we can drill our way out of debt and poverty. They see fracking as a way to "save" the family farm- despite evidence to the contrary and the recent findings that gas companies are reneging on royalties in PA.

They are planning a huge rally/picnic on Friday. An email sent out to members of the Joint Landowners Coalition of NY invites one and all to Otsiningo Park's north pavilion from 10 am - 4 pm for music, movies, speakers and maybe even some catered food - but bring a dish to pass.

"Please bring signs, banners, billboard mounted on trucks. Bring as many as possible!" says the memo. " This is the only chance we have to show President Obama just how many of us there are and how strong our support is..."

So if you can keep the gas you drill from escaping before it
is burned as fuel, you might have an advantage. The problem is that gas escapes
– from wells, pipelines, compressors. A couple years ago the federal
Environmental Protection Agency had estimated that 0.8 percent to 1.6 percent
of natural gas production escapes, on a national average.

Then last year the Environmental Defense Fund (EDF)
published a paper finding that as long as escaping methane was less than 3.2
percent of lifetime production, natural gas would be better than coal for
electrical production.According to EDF,
3.2 percent is the “threshold”;methane
emissions above that level would eliminate the justification for using gas as a
“transition fuel” to replace coal for electricity generation.

Now, new research shows that more – much more – methane is
escaping from gas production than thought. Studies by the National Oceanic and
Atmospheric Administration (NOAA) in Utah’s Uintah Basin showed that up to 12
percent of the gas produced could be going into the atmosphere instead of the
pipeline. The basin serves about 6,000 wells and accounts for about one percent
of the nation’s gas production.

A research team from the Cooperative Institute for Research
in Environmental Sciences (CIRES) flew over the basin at about 1,000 feet, gathering
air samples and taking readings over a period of several weeks. They used a “mass
balance” technique which follows an air mass at it moves into a region and then
flows out of that area. During their Feb. 3 testing they found that the area
leaked 60 tons of gas an hour. Some days it was far greater.

It’s not just the wells that are leaking; methane could potentially be leaking from processing plants, pipelines, and compressors. The problem with all this leaky methane is that it
contributes to smog – and Utah has smog levels that rival Los Angeles on its worst days. An EPA report concluded that the oil and gas industry was
responsible for about 99 percent of the volatile organic compounds found in the
basin which, when mixed with sunlight, creates ground level ozone. The smog was
so bad at times that the Salt Lake City airport has had to divert flights.

Add up the studies and you get a picture that shows drilling pollutes the air people breathe, creates smog, and adds a higher-than-predicted burden of greenhouse gases to our atmosphere. Now US Fish and Wildlife
Service say drilling is contributing to the loss of two plant species. The agency is asking for federal protection for two rare plant species, Graham’s beardtongue and White River beardtongue and is asking for them to be listed under the Endangered Species Act.

According to US Fish & Wildlife, both plants are endemic
to the Uintah Basin and over the past few years their range has been reduced by
oil and gas development, invasive species and grazing. The plants grow where
oil shale deposits that are rich in calcium carbonate touch the surface.

Friday, August 9, 2013

Back on July 9 Greg May, senior vice president of Tompkins
Trust Company Residential Mortgage lending, warned residents in Berkshire, NY
that gas drilling can bring high costs to landowners. One of his biggest
concerns: that “homeowners insurance normally excludes coverage if there are
active commercial operations occurring on the property.” Gas drilling falls
into that category.

Now, barely a month later, a landowner in the town of
Lebanon (Madison County, NY) is facing just that situation. According to Jim
Goldstein, town supervisor, the landowner was surprised when his insurance
company denied the renewal on his homeowner's insurance policy covering their
home and farm because there is a gas well on their property.

There are no problems regarding royalty payments, nor have
there been any incidents on the property. The gas royalties go to the previous
owner, but the current property owner holds the lease and royalty rights for
future wells.

So Goldstein checked out the situation with the insurance
agent, who writes a lot of policies in the county. Apparently this is a “new
trend that will come up as property owners fill out renewal applications,”
writes Goldstein.

So far this seems to be limited to property owners who have
gas wells, and so far it hasn’t extended to gas leases or to property owners
whose land was pooled into drilling units through compulsory integration.

But, continues Goldstein, “we will have to see how this
develops. Initially, we thought it was limited to one company but it turns out
it is a trend, and given how many property owners in Lebanon have gas wells on
their property, some dating back to the 1960s, this present a tremendous
potential problem as those individuals would not have insurance liability
coverage and will be exposed, not to mention have great difficulty persuading
others to buy their property when they are ready to sell.”

The case in question is on a property where the buyers inherited
the gas well and lease from the previous owner. Goldstein worries that other
farmers and homeowners may be facing similar insurance problems. Of further
concern, he notes, is that the state Department of Environmental Conservation –
which oversees and regulates gas drilling – is not aware of this trend. And,
says Goldstein, state officials know of no “high risk pool” available to homeowners
should they lose their insurance because of gas wells on their property.

“This appears to be directly related to perceived liability
of having a gas well on one’s property,” says Goldstein. “And we are talking
about Medina and Herkimer Sandstone formation wells, not the new proposed high
volume hydraulic fracturing process.” He estimates that 25 percent of Madison
County is leased, with about 60 wells in his town of Lebanon.

“If this becomes a widespread practice, this will change the
discussion significantly in the upstate region about gas drilling and
development,” says Goldstein. He doesn’t know whether insurance companies will
respond in a similar fashion to homeowners with gas infrastructure, like
pipelines or gathering systems on their properties. But, he says, “this could
have significant and profound implications for property owners and municipal
governments where gas wells currently exist or are anticipated.”

Tuesday, August 6, 2013

According to a report from Reuters, Chesapeake Energy has finally given up its fight to hold onto expired NY leases. For the past two years the gas company has been insisting that the leases should be extended beyond their initial termination date because they weren't allowed to use horizontal hydro-fracking in NY State. They pointed to the "force majeure" clause in their leases - a clause that states that the company wouldn't be held liable for not keeping the contract should a flood, hurricane, labor strike or some-such make it impossible to drill. They interpreted that to also include the state's hold on horizontal hydrofracking ... claiming that they "couldn't drill". A claim that US District Court Judge David Hurd rejected back in November.

For the past two years (and more in some cases) Chesapeake has been sending "force majeure" letters to landowners whose leases had expired. These letters claimed that the leases weren't "really" expired, and they offered new leases - with lots less money - to the landowners.

But now, after two years of legal fighting, they are ready to "walk away" from NY, says Reuters. It's not because NY is "fracking unfriendly" or "has a moratorium" - the real reason Chesapeake is tossing their cards on the table and leaving is because the legal battle is getting pricey and there are other, better places to drill. Chesapeake isn't the only player to leave the northeast; A couple weeks ago Hess Corporation and Newfield Appalachia pulled out of their leases in Wayne County, PA. It was a business decision, they told the press - better drilling elsewhere.

Friday, August 2, 2013

On June 28, Jeremy Alderson chained himself to the gate of
the Inergy gas storage facility in Watkins Glen, NY. Alderson, who lives in Hector
and publishes the “No Frack Almanac, was arrested earlier in the year for a
similar protest. But, the veteran protester said, “Nobody voted for this [converting
the salt mine to gas storage]. Nobody was consulted about this; it’s just being
imposed on us from outside.”

At issue is a plan to store liquified gas in salt caverns
beneath Seneca lake – caverns which have been declared structurally unsound and
prone to catastrophic accidents. More than 100,000 people depend on Seneca Lake
for their drinking water, and an accident would pollute that vital resource.

Local wineries, businesses, and community members have
expressed dissent over DEC’s less than stellar review of the potential economic
and environmental impacts of Inergy’s proposal to expand the gas storage
capacity of the facility from 1.5 to 10.0 billion cubic feet. Local municipal
elected officials are deaf to the pleas of constituents who are concerned about
the potential effects of the gas storage project. So Alderson, and a few others
who have brought their grievances to their electeds, are left with few options.

Alderson chose to chain himself to the gate and undergo a
second arrest. But this time, the gas corporation decided to try something new:
to prevent Alderson from further protests by filing a restraining order against
him.

A “restraining order”, also called an “order of protection”
is a legal injunction that requires a party to do, or to refrain from doing,
certain things. Such orders are commonly used in cases of domestic violence,
harassment, stalking or sexual assault to protect an injured party. However, courts are starting to use restraining orders to muzzle protesters. Peaceful protesters. Non-violent protesters.

Here is Alderson's report of what happened in court yesterday (August 1):

I went to court again today, this time in the Cayuta Town
court, where the case regarding my second arrest is now being heard.

Everything was as routine as I expected it to be, with me
pleading not guilty and my lawyer, Jerry Kinchy, saying that he would be filing
motions prior to trial.Then, out of the
blue, the assistant district attorney made the request that an order of protection
be granted, restraining me from appearing at the Inergy site.

Jerry objected that an order of protection can't be issued
on behalf of a corporation, but only on behalf of an individual.The D.A. argued that the order should be
issued restraining me from being near Barry Moon, who he said was the manager
of the Inergy facility (a different gentleman, identified, I believe, as
Inergy's "site manager," testified against me at my first trial, not
Mr. Moon).I should be kept away from
the Inergy facility, the DA said, because it is Mr. Moon's place of business,
and of course, I shouldn't be allowed to contact him or go near his residence.

I told the judge that I did not know Mr. Moon and would not
know if he was standing beside me, which would make compliance with this order
difficult. The judge, Robert E. Johnson, said I should stay away from the
Inergy facility and wrote out the order.As a result, I am now barred from being anywhere within 100 feet of the
Inergy fence.I am also barred from
"third party contact," meaning that I can't tell anybody to go to the
Inergy site for any reason, including for a peaceful protest. The judge made it
clear that violating this order would be a misdemeanor and a higher level of
seriousness than what I am facing now.

Leaving aside the fact that I am in some danger of
accidentally violating this order because I don't know where Mr. Moon's
residence is and I still wouldn't know him if I saw him, there are much more serious
issues here.For one thing, I have,
effectively, been given a punishment before my case has even been heard, and
that sure doesn't seem right.

A restraining order is understandable when issued to an
accused batterer, but it's a very different matter indeed when it becomes the
mechanism for taking away someone's right to freedom of speech, especially when
no evidence was even submitted to the court that my actions had done harm to Mr.
Moon or anyone else.In fact, the law
(NY CPL 530.13) states that the court "may for good cause shown"
issue such an order, but no cause -- good, bad, or indifferent -- was offered
in court today.

My wife keeps wondering aloud whose idea this was and she
suspects that it was Inergy's attorney who suggested it to the D.A.We can't know, of course, but could a Schuyler
County D.A. have come up with this novel legal theory on his own without
prompting?

Yes, I know that in a day and age when our president claims
he has the right to kill American citizens without trial, it's just kind of
quaint and old-fashioned to care about the Constitution, but I do care.And I simply cannot remember anything in the
Constitution giving the government authority to forbid free speech if there is
a risk that it will upset or inconvenience a corporation.

The part that really bothers me is what this says about
America.Jerry says he will file a
motion to have this overturned, but you can't file a motion to overturn
tyranny.